Saudi Telecom Co, the largest Arab telecom firm by market value, returned to profit growth after five consecutive quarters of decline by adding customers.

It, however, still missed analysts' fourth-quarter forecasts.

Saudi Telecom's profit in the three months to December 31 rose 9.6 percent to 3.05 billion riyals ($813.3 million), from 2.79 billion riyals a year earlier, it said in a statement on the Saudi bourse Web site.

The earnings missed all six forecasts in a Reuters net profit survey last month ranging from 3.22 billion riyals to 4 billion riyals. The average expectation was for profit growth of 24.7 percent.

Saudi Telecom, which lost its mobile phone monopoly in 2005 when Etihad Etisalat (Mobily) started operations, said subscriber numbers grew 22 percent in the fourth quarter. It did not give subscriber numbers.

Operating revenues in the quarter were 9.64 billion riyals compared with 7.82 billion riyals a year earlier, it said.

Full-year profit was 12.02 billion riyals versus 12.8 billion in 2006, the operator said, adding that earnings per share were 6.01 riyals per share versus 6.4 riyals a year earlier.

The company planned to pay a dividend of 1.25 riyals per share for the fourth quarter, it said.

Saudi Telecom, controlled by the government of the world's biggest oil exporter, has been expanding abroad as competition intensifies in its home market.

A third operator, affiliated with Kuwait's Mobile Telecommunications Co (Zain), plans to start a third mobile phone network this year in Saudi Arabia, home to about 25 million people.

Mobile phone penetration in the kingdom was almost 100 percent in the third quarter, Shuaa Capital said this month.

Saudi Telecom said on Sunday it had agreed to a $2.6 billion deal to buy 35 percent of Oger Telecom, gaining access to markets from Turkey to South Africa. It made its first foreign acquisition last year, when it bought 25 percent of Malaysia's Maxis in a $3 billion deal. - Reuters